Author Archives: Daily Market Report

Gold holds onto ground taken over $1800 mark; drop in real yields, inflation worries determining factors

(USAGOLD – 7/9/2020) –  Gold held onto ground taken beyond the $1800 mark over the past two days as concerns lingered about ramped-up coronavirus cases in the United States and the future direction the U.S. dollar.  It is trading up $2 on the day at $1813.  Silver continued to plow higher – up another 21¢ today at $19.01.  Saxo Bank’s Ole Hansen – often quoted in financial media – says that surging prices for both metals have been driven predominantly by sagging real yields on U.S. Treasuries.

“Spot gold has broken above $1800/oz thereby succeeding what it failed to do on two previous occasions most recently in 2012,”  he wrote yesterday in the bank’s regular client advisory. “With silver at the same time breaking resistance at $18.40/oz the path towards higher prices have now opened up. The break could now signal an extension for gold towards the 2011 record high at $1920/oz while silver could take aim at the next level of resistance just below $19/oz followed by $19.65/oz. … The single biggest input that has driven the latest move higher has been the recent developments in U.S. yields. While the yield on ten-year notes remain anchored in a relative tight range, we have seen breakeven yields, an expression of inflation, move higher leading to a drop in real yields to the current -0.8%. These developments basically highlight what a U.S. market with yield-curve control would look like into a rising inflation scenario.”

Chart of the Day

overlay line chart showing 10 year Treasury yield and gold price inverse correlation

Sources:  Federal Reserve Board of Governors, ICE Benchmark Administration, St. Louis Federal Reserve [FRED]

Chart note: “A ‘perfect storm’ of surging government debt levels, plunging real bond yields, rising coronavirus cases and deteriorating economic forecasts pushed the price of gold to an eight-year high [in late June], and some analysts now project the metal to top its all-time high within the next 12 months,” says analyst Frank Holmes of US Global Investors. Holmes finds himself in the company of a large number of analysts who have predicted the metal would reach all-time highs in the near future. He says gold is trading inversely to falling bond yields – something illustrated unambiguously in our Chart of the Day.

Posted in Daily Market Report, dailyquotes, Today's top gold news and opinion |

Gold breaches $1800 for the first time since 2011 on strong yuan, COVID-19 concerns

(USAGOLD – 7/8/2020) –  Gold breached the $1800 this morning for the first time since 2011. It is trading at $1806.50 – up $9 on the day.  Silver is up 22¢ at $18.57. Today’s advance follows a strong showing yesterday that coincided with sharp appreciation in China’s yuan and growing investor concern about a resurgence of COVID-19 cases within the United States. Many analysts and investors see the aggressive stimulus policies launched by governments and central banks globally as encouraging inflation down the road – potentially even the runaway variety. The unconventional summer rally in gold and silver that began in early May defies the sluggish market behavior usually associated with this time of year. Gold is up almost 7% and silver over 24% (!) since May 1.

“As of right now,” says markets analyst Frank Holmes in a recent advisory posted at Forbes, “the Fed’s balance sheet stands at $7 trillion, or 33% of US GDP. And earlier this month, the Treasury’s public debt soared past $26 trillion, an incredible 120% of the entire US economy. This isn’t sustainable, obviously, and some analysts now see Dollar-denominated gold hitting a new all-time high in the next 12 months, even in a risk-on environment. Both Morgan Stanley and Citigroup maintain their call for $2000 gold by mid-2021. London-based research firm Edison goes even further. In a note dated June 23, analysts there commented that gold should be near $1900, ‘with the potential for this to rise to in excess of $3000.'”

Chart of the Day

bar chart showing the growth in the national debt thus far in 2020

Chart note: The additions to the national debt thus far this year have been nothing short of astonishing – $3.22 trillion since January 1, 2020, and $678 billion over the past 30-days (through June 30 ). One wonders how much debt the U.S. Treasury can place with private and international investors and how much will be financed via the Federal Reserve’s bottomless checkbook.  Though few on Wall Street (or Main Street for that matter) would quarrel with the spending decisions governments have made in recent months, a good many are preparing for the potential consequences – whether those policies succeed or fail. That is where gold might come in handy.

Posted in Daily Market Report, dailyquotes, Today's top gold news and opinion |

Notable Quotable

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“My studies of the 17 major financial crises since the founding of the Republic reveal that over-optimism is an important driver of the bubbles that eventually become busts. As the legendary investor, Sir John Templeton, once said, ‘The four most dangerous words in investing are ‘This time is different.’ Such was the mind-set that real estate prices could only rise (2008), dot-com companies would forever grow and be profitable (2001), or that the Russian government would never default (1998). “

Robert F. Bruner
The Hill

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Posted in Notable Quotable, Today's top gold news and opinion | Tagged |

Gold takes breather from summertime push to the upside; TD Securities says metal in ‘midst of regime shift’ to inflation hedge

(USAGOLD – 7/7/2020) –  Gold – down $5.50 at $1780 – is taking a breather from its summertime push to the upside this morning.  Silver is down 16¢ at $18.19.  As pointed out yesterday, the rally in both metals since early May defies the sluggish market behavior usually associated with the summer months. Both metals turned in strong upside performances last summer, though for different reasons, so perhaps the seasonal June-July discount should no longer be viewed as a given. The rising prices this time around are most directly related to the economic ill effects of the coronavirus and the aggressive stimulus/rescue programs launched by central banks and governments around the world to combat it. Many investors see these policies as encouraging inflation down the road – potentially even the runaway variety.

“In precious metals,” says TD Securities in an analysis posted at FXStreet, “nearly every trading session in the past few months has a sense of déjà vu, as traders aggressively sell the yellow metal in response to risk-on, only to see gold grind higher shortly after. This trading behavior is entirely consistent with our market thesis – gold is the midst of a regime shift, transitioning from trading as a safe-haven asset to an inflation-hedge product. …Looking forward, the world-war era fiscal and central bank stimulus, the change in the central bank template that will incorporate ‘symmetric inflation targets’ and unwinding globalization, also suggest that inflation-hedge assets may grow in popularity.”

Chart of the Day

Gold Production by Country
(2019)graphic image map of gold production by country for 2019Image courtesy of World Gold Council • • • Click to enlarge

Chart note:  China is the top gold producer at this juncture but some analysts believe it may be surpassed in coming years by both Russia (currently number two) and Australia (currently number three). 

Posted in Daily Market Report, dailyquotes, Today's top gold news and opinion |

Gold keeps quiet summer uptrend intact, replaces computers as top U.S. import in May

(USAGOLD – 7/6/2020) – Gold kept its quiet summer uptrend intact this morning pushing past the $1780 mark to $1786 – up $9 on the day. Silver also continued its strong move to the upside – up 28¢ on the day at $18.39. Typically the summer months feature dull price action for the precious metals, but for the past two years prices have moved sharply higher. Gold is up a respectable 5.8% since the May 1 official start to the doldrums and silver notably is up 22.6% (as of this morning’s pricing). Surprisingly, gold was the top import for the U.S. in May. “Gold is a big red flag,” writes trade analyst Ken Roberts in a Forbes article. “It attracts buyers frightened by the economic outlook, sending the price higher. The value of gold imports increased more than 1,700% over the previous month of May, replacing computers as the top U.S. import.”

Chart[s] of the Day

Gold, silver and the DJIA – Year to Date

overlay line chart showing gold silver stocks ytd 7-2-20Chart courtesy of TradingView.com • • • Click to enlarge.

Gold, silver and the DJIA – One Year

overlay chart showing gold silver stocks 12 months 7-2-20

Chart courtesy of TradingView.com • • • Click to enlarge.

Chart note: As of last Thursday, gold is up 25.06% over the past 12 months. Silver is up 17.7% and the Dow Jones Industrial Average is down 4.22%.  Year to date, gold is up 16.05%. Silver is level and the DJIA is down 10.54%.

Posted in Daily Market Report, dailyquotes, Today's top gold news and opinion |

Gold tracks lower in quiet pre-holiday trading, Bank of America predicts $3000 gold over next 18 months

No DMR today.  Back Tuesday. Happy Fourth of July, everyone.


(USAGOLD – 7/2/2020) – Gold tracked marginally lower in quiet pre-holiday trading.  It is down $4 at $1769.  Silver is down 9¢ at $17.99. Bank of America recently upped its forecast for gold over the next 18 months to $3000 per ounce.  “If you put the three together – extremely lax fiscal policy, extremely lax monetary policy, and a huge increase in bank deposits,” says Francisco Blanch, head of derivatives research at the Bank of America, in a Bloomberg interview yesterday, ” I think there is a pretty good chance here we will see a big rotation into gold driving prices a lot higher.  Investors are confused. They do not know what to do with their asset allocations and I think a lot of them will choose to go for the yellow metal as an alternative to cash in their portfolios … and by the way when I say investors, I don’t just mean retail investors, I also think institutional investors are going to make that choice.”  Blanch forecasts a return of inflation pointing out that the Fed has “done in 18 days what it took almost nine months to do in 2008 and 2009.”

Chart of the Day

overlay line chart showing the relationship between gold and the St. Louis Fed's Uncertainty Index

Chart courtesy of Scott R. Baker and the St. Louis Federal Reserve [FRED]

Chart note:  The St. Louis Fed’s Uncertainty Index, now at all-time highs, is based on newspaper coverage frequency.  Our US index,” says the authors, spikes near tight presidential elections, Gulf Wars I and II, the 9/11 attacks, the failure of Lehman Brothers, the 2011 debt-ceiling dispute and other major battles over fiscal policy. Using firm-level data, we find that policy uncertainty raises stock price volatility and reduces investment and employment in policy-sensitive sectors like defense, healthcare, and infrastructure construction. At the macro level, policy uncertainty innovations foreshadow declines in investment, output, and employment in the United States …”  Superimpose the price of gold and you see that the most vertical aspect of its response post-2008 came well-after the Uncertainty Index peaked.  A trend line for gold similar to what we saw in 2009-2010 is developing now. Also, note the St. Louis Fed’s addition of a grey recession bar in 2020.

Posted in dailyquotes |

Gold tracks marginally lower, Bank of America predicts $3000 gold over next 18 months

(USAGOLD – 7/2/2020) – Gold tracked marginally lower in quiet pre-holiday trading.  It is down $4 at $1769.  Silver is down 9¢ at $17.99. Bank of America recently upped its forecast for gold over the next 18 months to $3000 per ounce.  “If you put the three together – extremely lax fiscal policy, extremely lax monetary policy, and a huge increase in bank deposits,” says Francisco Blanch, head of derivatives research at the Bank of America, in a Bloomberg interview yesterday, ” I think there is a pretty good chance here we will see a big rotation into gold driving prices a lot higher.  Investors are confused. They do not know what to do with their asset allocations and I think a lot of them will choose to go for the yellow metal as an alternative to cash in their portfolios … and by the way when I say investors, I don’t just mean retail investors, I also think institutional investors are going to make that choice.”  Blanch forecasts a return of inflation pointing out that the Fed has “done in 18 days what it took almost nine months to do in 2008 and 2009.”

Chart of the Day

overlay line chart showing the relationship between gold and the St. Louis Fed's Uncertainty Index

Chart courtesy of Scott R. Baker and the St. Louis Federal Reserve [FRED]

Chart note:  The St. Louis Fed’s Uncertainty Index, now at all-time highs, is based on newspaper coverage frequency.  Our US index,” says the authors, spikes near tight presidential elections, Gulf Wars I and II, the 9/11 attacks, the failure of Lehman Brothers, the 2011 debt-ceiling dispute and other major battles over fiscal policy. Using firm-level data, we find that policy uncertainty raises stock price volatility and reduces investment and employment in policy-sensitive sectors like defense, healthcare, and infrastructure construction. At the macro level, policy uncertainty innovations foreshadow declines in investment, output, and employment in the United States …”  Superimpose the price of gold and you see that the most vertical aspect of its response post-2008 came well-after the Uncertainty Index peaked.  A trend line for gold similar to what we saw in 2009-2010 is developing now. Also, note the St. Louis Fed’s addition of a grey recession bar in 2020.

Posted in Today's top gold news and opinion |

Gold tracks marginally lower, Bank of America predicts $3000 gold over next 18 months


(USAGOLD – 7/2/2020) – Gold tracked marginally lower in quiet pre-holiday trading.  It is down $4 at $1769.  Silver is down 9¢ at $17.99. Bank of America recently upped its forecast for gold over the next 18 months to $3000 per ounce.  “If you put the three together – extremely lax fiscal policy, extremely lax monetary policy, and a huge increase in bank deposits,” says Francisco Blanch, head of derivatives research at the Bank of America, in a Bloomberg interview yesterday, ” I think there is a pretty good chance here we will see a big rotation into gold driving prices a lot higher.  Investors are confused. They do not know what to do with their asset allocations and I think a lot of them will choose to go for the yellow metal as an alternative to cash in their portfolios … and by the way when I say investors, I don’t just mean retail investors, I also think institutional investors are going to make that choice.”  Blanch forecasts a return of inflation pointing out that the Fed has “done in 18 days what it took almost nine months to do in 2008 and 2009.”

Chart of the Day

overlay line chart showing the relationship between gold and the St. Louis Fed's Uncertainty Index

Chart courtesy of Scott R. Baker and the St. Louis Federal Reserve [FRED]

Chart note:  The St. Louis Fed’s Uncertainty Index, now at all-time highs, is based on newspaper coverage frequency.  Our US index,” says the authors, spikes near tight presidential elections, Gulf Wars I and II, the 9/11 attacks, the failure of Lehman Brothers, the 2011 debt-ceiling dispute and other major battles over fiscal policy. Using firm-level data, we find that policy uncertainty raises stock price volatility and reduces investment and employment in policy-sensitive sectors like defense, healthcare, and infrastructure construction. At the macro level, policy uncertainty innovations foreshadow declines in investment, output, and employment in the United States …”  Superimpose the price of gold and you see that the most vertical aspect of its response post-2008 came well-after the Uncertainty Index peaked.  A trend line for gold similar to what we saw in 2009-2010 is developing now. Also, note the St. Louis Fed’s addition of a grey recession bar in 2020.

Posted in dailyquotes |

Gold takes modest turn to the downside after yesterday’s advance

(USAGOLD – 7/1/2020) – Gold took a modest turn to the downside this morning after yesterday’s intraday advance that threatened at one point to break the $1790 mark. It is trading at $1782 in today’s early going – down $3.  Silver is up 7¢ at $18.35. The summer advance in both metals is most directly related to the economic ill-effects of the coronavirus and the stimulus/rescue programs launched by central banks and governments around the world to combat it. The second quarter was a good one for precious metals. Gold was up 9.5% and silver, playing catch-up, was up 25%.  The quarter ended with the gold-silver ratio closing from 113:1 to 98:1.

“With 10yr US real yields threatening to break lower,” says Credit Suisse in a report cited at FXStreet, “we look for gold to correspondingly break higher from its range above $1765 to confirm a resumption of its core bull trend with resistance seen at $1796/1803 next. … Big picture, we continue to eventually look for new highs above $1921, with resistance then seen next at $2000, then $2075/80.” Also posted at FXStreet, Citibank sees “a slow grind higher” for gold with $1900 the target in six to twelve months and then another leg higher in 2021 “towards $2000 per ounce.”

Chart[s] of the Day

gold seasonal chart 10 year average

line chart showing silver seasonality 10-year average

Charts courtesy of GoldChartsRUs.com

Chart note: With everything else that is going on in the economy and financial markets, It is easy to overlook the fact that we are heading into the summer doldrums for the precious metals – a time historically when demand sags, prices typically stay in a range, and dip-buyers take whatever opportunities might present themselves. Then again, as unpredictable as markets have become, anything could happen – including a summer rally in precious metals prices.

Posted in Daily Market Report, dailyquotes, Today's top gold news and opinion |

A golden future

EdisonGroup/Charles Gibson/June 2020

“Since the COVID-19 crisis hit, the Federal Reserve has returned to bond-buying with a vengeance. After cutting interest rates to (effectively) zero and initially saying it would buy US$700bn in bonds, on 23 March it removed the brakes stating it will ‘purchase Treasury securities and agency mortgage-backed securities in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy’. With the total US monetary base now at US$5.1tn (and given the close historical correlation between the two), the gold price could very reasonably be expected to rise to US$1,892/oz and potentially as high as US$3,000/oz.”

USAGOLD note:  At $1892 to $3000 per ounce a “golden” future indeed …… The chart below shows the correlation between gold and the monetary base Gibson mentions in the snip above.

overlay chart showing gold and the monetary base June 2020

Sources:  ICE Benchmark Administration, St. Louis Federal Reserve [FRED]


Repost from 6-25-2020

Posted in Today's top gold news and opinion |

Gold tracks lower in quiet seasonal trade, Hendry sees ‘the dawn of chaos’

(USAGOLD – 6/30/2020) – Gold tracked lower in quiet seasonal trading this morning despite a warning from Fed chairman Powell that “the path forward for the economy is extraordinarily uncertain” and a Bureau of Labor Statistics report showing that nearly half of the U.S. population is out of a job. The yellow metal is down $3 on the day at $1771.  Silver is up 1¢ at $17.93.

Former hedge fund manager Hugh Hendry (who says he is “long gold”) is out with an elaborate and somewhat unconventional analysis of the present economic situation.  “… [W]ith overseas nations printing central-bank reserves to buy dollar assets,” he warns in The Dawn of Chaos, “and with banks and credit markets now uncomfortable with owning Treasuries, and what with a podcast star running the Fed, I can see US stock and gold prices rising considerably higher and volatility exploding to the upside … I can see the dawn of CHAOS, people, and it’s going to change the course of history once and for all!” [Emphasis added.]  Hendry believes a massive devaluation of the dollar is required saying “[i]f The Fed doesn’t change then the world’s going to snap.”

Chart of the Day

overlay line chart showing the US dollar index and gold performance 2017 to present

Chart note:  As you can see, gold and the dollar index moved higher in tandem from late 2019. Since the dollar’s mid-March peak, they have moved in opposite directions with the dollar going lower and gold higher indicating that the long-established inverse correlation might be coming back into play.

Posted in Daily Market Report, dailyquotes, Today's top gold news and opinion |

Gold off to quiet start for the week

(USAGOLD – 6/29/2020) – Gold is level in quiet trading to start the week seemingly unaffected by the surge in coronavirus cases across the southern tier of states and further weakness in the dollar.  It is down $1.50 on the day at $1771.  Silver is down 2¢ at $17.82. Speculators upped their long positions in gold, according to the Commitment of Traders report released on Friday – a change in the dominant trend that began earlier this year.

“Gold speculators,” says COT analyst Zach Storella at Investing.com, “boosted their bullish bets higher for a second straight week and this week’s total (+27,609 contracts) marked the highest one-week gain of the past eighteen weeks. The speculative position had been very much on a downtrend since late February with declines in twelve out of sixteen weeks through June 9th with an overall drop of -145,036 contracts from the bullish position. However, the last two weeks have provided a rebound for the speculative position with a total rise of +43,344 contracts over that time-frame.”

We should keep in mind that a good many contract holders stood for delivery in the recent past putting heavy pressure on bullion supplies. Record U.S. bullion imports from Swiss refiners in April – nearly 112 tonnes – was a reflection of that demand. If the Comex market is moving from subdued to more aggressive long positioning, it could presage higher delivery volumes as we move into the seasonally active second half of the year.

Chart of the Day

Gold and silver – One Year

overlay line chart showing gold and silver price performance in percent through 6-26-20Chart courtesy of TradingView.com
Click to Enlarge

Gold and silver – Year to Dateoverlay line chart showing gold and silver price performance in percent year to day 6-26-2020Chart courtesy of TradingView.com
Click to enlarge

Chart note: Over the past twelve months, gold is up 26.85%, silver is up 18.68% as of this past Friday.  Year to date, gold is up 15.76%, silver is up .99% as of this past Friday.

Posted in Daily Market Report, dailyquotes, Today's top gold news and opinion |

Gold edges lower in quiet summer trading

(USAGOLD – 6/25/2020) – Gold edged lower today in quiet summer trading. It is down $3 on the day at $1759.  Silver is level at $17.89. The top-of-the-list concerns driving investor interest in gold remain the same – inflation, deflation, the success (or lack of success) of aggressive central bank policies, etc. Those who fear policymakers’ efforts will fall short worry about an outcome like the 1930s Great Depression. Those who think the money printing will revive moribund economies worry it will also create runaway inflation. Both camps have turned to gold for safe-haven purposes and, over the past few months, prices have pushed steadily higher as a result. As we close out another week of subdued price action, gold is up 24.9% over the past 12 months and silver is up 16.7%. The Dow Jones Industrial Average by way of contrast is down 3% over the same period.

Table of the Day

table showing gold ETF flows by country May 2020

Table courtesy of the World Gold Council

Table note:  The strong showing in gold ETF flows the first five months of the year is a reflection of continued interest in gold bullion among funds and institutions hedging an array of economic, financial, and geopolitical concerns. United States stockpiles were up 20.1% in May.  Also, note the strong interest in various European countries and Mainland China.  At 3510 metric tonnes, ETF stockpiles globally now exceed the official gold reserves of every nation on earth except the United States. (Funds and institutions are the primary market for gold ETFs. Individual investors generally opt for physical coins and bullion  for reasons explained by highly-regarded fund manager Jeff Gundlach here.)

Posted in Daily Market Report, dailyquotes, Today's top gold news and opinion |

Gold continues to test waters above $1750; Bank of America says breakout already underway

(USAGOLD – 6/25/2020) – Gold continues to test the waters above the $1750 mark, and is up $4 in today’s early going at $1767.  Silver is up 21¢ at $17.77.  Today’s larger than expected unemployment number is likely to be a source of market worry as is the escalating virus case numbers in a number of states.  Gold – up 1.7%  thus far in June – is bucking the seasonal bias to the downside.  Silver is down about 2% thus far in June.  In a note to its clients earlier in the week highlighted at FXStreet, Bank of America says that a gold breakout is already underway and that its price could reach record levels above $1900 by the end of 2020.

Chart of the Day

chart comparing DJIA and poll assessing Republican chances of retaining the White House

Chart courtesy of SentimenTrader.com

Chart note: Whatever your politics, there seems to be a clear connection between President Trump’s re-election chances and the course of the Dow Jones Industrial Average.

Posted in Daily Market Report, dailyquotes, Today's top gold news and opinion |

Gold weakens in today’s early going; Credit Suisse and Citibank out with mid-year forecasts

(USAGOLD – 6/24/2020) –  Gold looks like it is weakening in today’s early going after making an attempt at the $1780 level overnight.  It is now down $2 on the day at $1768.  Silver is down 45¢ at $17.56. A couple of big bank trading desks – Credit Suisse and Citibank – are out with mid-year forecasts this week. “With 10yr US real yields threatening to break lower,” says Credit Suisse in a report cited at FXStreet, “we look for gold to correspondingly break higher from its range above $1765 to confirm a resumption of its core bull trend with resistance seen at $1796/1803 next. … Big picture, we continue to eventually look for new highs above $1921, with resistance then seen next at $2000, then $2075/80.” Also posted at FXStreet, Citibank sees “a slow grind higher” for gold with $1900 the target in six to twelve months and then another leg higher in 2021 “towards $2000 per ounce.”

Chart[s] of the Day

gold seasonal chart 10 year average

line chart showing silver seasonality 10-year average

Charts courtesy of GoldChartsRUs.com

Chart note: With everything else that is going on in the economy and financial markets, It is easy to overlook the fact that we are heading into the summer doldrums for the precious metals – a time historically when demand sags, prices typically stay in a range, and dip-buyers take whatever opportunities might present themselves. Then again, as unpredictable as markets have become, anything could happen – including a summer rally in precious metals prices.

Posted in Daily Market Report, dailyquotes, Today's top gold news and opinion |

Gold inches higher in early trading; silver outperforms gold over last three months – up 39% to gold’s 16.5%

(USAGOLD – 6/23/2020) – Gold inched higher in quiet overnight and early U.S. trading as investors kept a wary eye on reopening economies around the world and attempted to sort out how the process will play out in financial markets.  Gold is up $3.50 at $1760.  Silver is up 14¢ at $17.93.  Gold has been among the top performers over the past three months, but since late March, when the full effects of the virus began to be felt, silver has outperformed its kindred metal by a wide margin – up 38.9% to gold’s 16.5%.  (On March 20, silver closed trading at $12.59 per ounce. Please see our Chart of the Day)

Goldman Sachs recently revised its twelve-month silver outlook from $15 per troy ounce to $22 per troy ounce. “[C]oordinated global stimulus,” it says in a report highlighted at ZeroHedge, “will help generate growth in industrial production and global economic activity. Relative to gold, silver demand is more closely tied to industrial production, accounting for 50% of its demand. Therefore, as the economy recovers and ‘Fear’ based demand for gold moderates, we expect silver industrial demand to increase, driving up prices. Silver also stands to benefit from growing investment in solar power. Secondly, we have argued in the past that silver is the precious metal of second choice after gold. This means that when interest in precious metals is moderate investors may still add to gold but silver often gets overlooked. However, when interest in precious metals is surging (as it is now) a lot of investors historically diversify part of their gold purchases with silver.” [Emphasis added.]

Chart of the Day

overlay chart showing gold and silver price appreciation over the last three months silver outperformed gold by a wide margin

Chart courtesy of TradingView.com

Chart note; Gold has been among the top performers over the past three months, but since late March, when the full effects of the virus began to be felt, silver has outperformed its kindred metal by a wide margin – up 38.9% to gold’s 16.5%. 

Posted in Daily Market Report, dailyquotes, Today's top gold news and opinion |

Gold nears $1760 in early trading; U.S. bullion imports from top Swiss refineries at record levels

(USAGOLD – 6/22/2020) –  Gold surged past the $1750 resistance level in early U.S. trading as various localities reported a resurgence in coronavirus cases. That resurgence, in turn, is re-igniting recession concerns and safe-haven precious metals’ demand among investors. Gold is up $12 at $1758.  Silver is up 31¢ at $18.00. Strong gold bullion demand among funds and institutions has been a centerpiece in gold’s strong price performance thus far this year (Please see our Chart[s] of the Day].

“The gold exports from Switzerland to the U.S. hit a new record in the month of May,” reports Paul Ploumis at the Scrap Monster website, “continuing the trend from the previous month. On the other hand, the shipments to major Asian destinations- China and India, which have been the traditional buyers of Swiss gold, witnessed notable decline. The Swiss gold shipments to the U.S. during the month totaled 126.6 tonnes, worth nearly $7 billion. This was the biggest ever monthly shipments in history. It must be noted that the country had imported 111.7 tonnes of gold from Switzerland in April this year. The gold shipments since March this year is almost 15 times more than the total shipments during the entire year 2019.” Most of the world’s top gold bullion refineries are located in Switzerland.

Chart[s] of the Day

Gold, silver and Dow Jones Industrial Average – One Year

overlay line chart showing gold silver stocks 12 months as of 6-19-2020
Chart courtesy of TradingView.com
Click to enlarge

Gold, silver and Dow Jones Industrial Average – Year to Date

overlay line chart showing gold silver stocks year to day 6-19-20

Chart courtesy of TradingView.com
Click to enlarge

Chart note:   While stocks have continued to garner considerable attention in the mainstream financial media, gold and silver have quietly outperformed the Dow Jones Industrial Average. Over the past twelve months, gold is up 28.15%, silver is up 15.93%, and the Dow Jones Industrial Average is down 3.34%.  Year to date, gold is up 14.01%, silver is down 2.28% and the Dow Jones Industrial Average is down 11.24%. 

Posted in Daily Market Report, dailyquotes, Today's top gold news and opinion |

Gold pushes higher in Asia overnight, Goldman upgrades forecast to $2000 per ounce from $1800

(USAGOLD – 6/19/2020) – Gold pushed higher during Asian trading hours in what appears to be a response to trade talks breaking down once again between the United States and China. It then picked up some momentum on the open in the United States and is now trading at $1737 – up $13 on the day.  Silver is up 33¢ at $17.74.  Goldman Sachs yesterday raised its 12-month price forecast to $2000 from $1800 previously, according to a Reuters report, saying it expected gold’s rally to continue “due to currency debasement fears and economic uncertainty caused by the coronavirus crisis.”

The top-of-the-list concerns driving investor interest in gold remain the same – inflation, deflation, the success (or lack of success) of aggressive central bank policies, etc. Those who fear policymakers’ efforts will fall short worry about an outcome like the 1930s Great Depression. Those who think the money printing will revive moribund economies worry it will also create runaway inflation. Both camps have turned to gold for safe-haven purposes and, over the past few months, prices have pushed steadily higher as a result. As we close out a subdued week for precious metals, gold is up 27.5% over the past 12 months and silver is up 16.2%.

Chart of the Day

chart showing the St. Louis Fed's Weekly Economic Index 6-6-2020

Sources:  Daniel J. Lewis, St. Louis Federal Reserve [FRED]

Chart note 1:  As you can see, the drop since early March in the Weekly Economic Index is worse than the one during the 2008 financial crisis.  The Index was developed by Daniel Lewis, economist at the Federal Reserve Bank of New York, Karel Mertens, senior economic policy advisor at the Federal Reserve Bank of Dallas, and James Stock, Harold Hitchings Burbank Professor of Political Economy, Faculty of Arts and Sciences of Harvard University, so it is highly credentialed.  If its current readings go unchanged through the end of the quarter, it would portend a roughly 11% drop in GDP from 2019.

Chart note 2:  “The WEI,” says the St. Louis Fed, “is an index of real economic activity using timely and relevant high-frequency data. It represents the common component of ten different daily and weekly series covering consumer behavior, the labor market, and production. The WEI is scaled to the four-quarter GDP growth rate; for example, if the WEI reads -2 percent and the current level of the WEI persists for an entire quarter, one would expect, on average, GDP that quarter to be 2 percent lower than a year previously.”

Posted in Daily Market Report, dailyquotes, Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Gold, silver trade quietly in early days of summer doldrums

(USAGOLD – 6/18/2020) – Gold continues to trade quietly this morning as we move into the early days of the annual summer doldrums. It is level at $1728. Likewise, silver is level on the day at $17.54. Some think the current rangebound trading is an indication of imminent decline while others see it as laying the groundwork for a break to the upside. Gold Newsletter’s Brien Lundin is in the latter grouping.

“The ‘soft patch’ I’d predicted for both gold and silver are still in effect,” he says in a recent reader advisory, “but it’s been more along the lines of extending a consolidation or ‘flag’ pattern.  As readers probably know well, in a bull market (and this is a bull market) this pattern should end with a breakout to the upside. We’ll just have to see what the precipitating event will be and when it will occur. I would have thought it would have come with Monday’s announcement by the Fed that it would begin buying the debt of individual companies. As I noted in yesterday’s Golden Opportunities, the Fed is crossing an important philosophical bridge here — essentially another big step toward total central planning of the economy. Rest assured, more steps are to come.”

Chart of the Day

bar chart showing national debt during 2020

Chart note: The additions to the national debt thus far this year have been nothing short of astonishing – $2.93 trillion since January 1, 2020, and $820 billion over the past 30-days (through June 14 ). One wonders how much debt the U.S. Treasury can place with private and international investors and how much will be financed via the Federal Reserve’s bottomless checkbook.  Though few on Wall Street (or Main Street for that matter) would quarrel with the spending decisions governments have made in recent months, a good many are preparing for the potential consequences – whether those policies succeed or fail. That is where gold might come in handy.

Posted in Daily Market Report, dailyquotes, Today's top gold news and opinion |

Gold down in subdued trading ahead of more Powell testimony today

(USAGOLD – 6/17/2020) – Gold is down today in subdued trading in advance of Fed chairman Powell’s second day of Congressional testimony and generally quiet conditions in financial markets. It is down $6 at $1722. Silver is up 6¢ at $17.59. Sharps Pixley’s Lawrie Williams offers some practical advice this morning worth passing along – particularly for those still skeptical that the worst of the pandemic crisis is behind us. “Because there is so much uncertainty around the likely length and depth of the economic downturn facing us all,” he says, “it is probably wise to hold cash, rather than equities, or put one’s faith in the traditional safe havens like gold to protect one’s wealth such as it may be.  Indeed cash may not be that safe either as the measures central banks have been taking to prop up domestic economies, could well result in serious inflationary pressures ahead due to the huge growth in money supply – and inflation destroys the inherent value of cash.  Again I repeat the mantra of Michael Lewitt of The Credit Strategist fame: ‘Buy gold and save yourselves.'”

Chart of the Day

line chart showing the gold-silver ratio from 1915 to present with annotationsChart courtesy of F.T. Dao and Gold-Eagle
Click to enlarge

Chart note: “We expect GSR [the gold-silver ratio] first drop from a historical high value of 120 to 60,” says chart analyst F.T. Dao in a Gold-Eagle article, “and then to 30. The drop will take several years. What does the drop represent? Clearly for the 2020 crisis, it means that silver is rapidly joining gold as safe-haven money. This is Nature’s way to put a stop to unlimited currency printing, leading to a Great Monetary Reset, where gold and silver will pay an important role.”

 

Posted in Daily Market Report, dailyquotes, Today's top gold news and opinion |